Arthur Hayes’ ‘Withdraw and Shield’ Zcash War Cry Could Make ZEC’s Next Move Its Wildest Yet

Former BitMEX CEO Arthur Hayes has advocated for Zcash ($ZEC) holders to withdraw their coins from centralized exchanges (CEXs) and move them into self-custodial, shielded addresses, revealing ZEC is now his second-largest position after Bitcoin. This call coincides with Zcash's third halving, which will cut the block subsidy and new supply issuance by 50% (from 3.125 to 1.5625 ZEC per block). Hayes' strategy aims to tighten the tradable float by moving available supply into shielded pools, where coins have a lower near-term spend probability, thereby affecting market microstructure like depth and slippage.

This move is framed against regulatory pressures, including the EU's AMLR and FATF's Travel Rule updates, which impact exchange policies and venue risk, as demonstrated by past delisting threats against ZEC. Zcash's optional privacy design allows it to carry compliance metadata, potentially offering an advantage over default-private coins like Monero. Three near-term scenarios exist: continued supply reduction via shielding leading to a tighter float; potential regional delistings in the EU ahead of AMLR; or a 'privacy flywheel' where increased shielding shrinks the float faster than issuance can replenish it.

The math suggests that a five percentage point increase in shielded supply, where shielded coins spend at half the rate of transparent ones, could reduce effective sell-side liquidity by 7–10% before the halving's supply cut even takes effect. Market participants will monitor if Hayes' instruction translates into a persistent float squeeze, evidenced by widening basis on perpetuals and changes in order-book depth.

(Source：CryptoSlate)